Investing in Human Capital as a Driver of Economic Growth in Nigeria

Nigeria, a developing economy, is endowed with vast potential, including abundant natural resources. The country, however, continually faces multifaceted developmental and systemic challenges, most of which have been attributed to inadequate investment in education, health, and workforce skills, among other factors. This study examines the impact of human capital investment on driving economic growth in Nigeria between 1990 and 2023. Using the Autoregressive Distributed Lag (ARDL) model, the study examines the impact of government expenditure on education (EDU), health (HEA), school enrollment (ENR), life expectancy (LEX), and literacy rate (LIT) on Gross Domestic Product (GDP). The Augmented Dickey Fuller (ADF) test confirmed a mix of I(0) and I(1) stationarity, justifying the ARDL approach. Empirical results reveal that education, health, and literacy significantly enhance economic growth both in the short and long run, while life expectancy and enrollment show mixed effects. The findings underscore the importance of sustained investment in human capital as a catalyst for inclusive growth in Nigeria. Policy recommendations include scaling up public and private investment in education and healthcare, strengthening vocational and digital skills programs, and addressing structural inefficiencies to maximize returns on human capital. The study contributes to contemporary debates on the nexus between human capital and growth, aligning with recent empirical evidence from developing economies.